Ah freedom, being a charge card to get by. However, the one course not given in school these days is how to use credit card accounts properly. As a matter of fact, people with poor credit scores usually obtain their credit scores as young adults. This is why I can't stress how important it is to use credit card accounts properly. Here are a couple of tips:

Never spend more than 50% of your credit line: When consumers first get a new credit card, they are given a specific credit line. This credit limit is the amount of money that consumer will be able to borrow using that particular charge card account. However, it is best not to exceed 50% of your credit line. This is because people facing financial hardships normally will use all of the money on their credit cards first. Therefore, spending more than 50% of your credit line insinuates to the banks that you are starting to experience a financial hardship and may have a harmful affect on your credit score.

Always send payments at least 2 weeks early: This is a big key to getting and maintaining a good credit score. Although when people send birthday cards, they usually are received within 3 days, the recipient does not have to process the message. When it comes to banks, they may receive your payment within 3 days of you sending it but this payment still needs to be processed. With thousands of payments coming in each month, it is understandable that these payments may take this time. Sending payments 2 weeks early assures that these payments will always be received on time.

Never pay just the minimum payment: Credit card minimum payments are exactly that, the minimum amount of money the bank is willing to accept as a payment for the charge card account debt. This means that it is indeed OK to send more than the minimum payment. A best practice is to send at least double the minimum payment. By doing so, Americans will notice a speedy increase in their credit score. This is because by paying back loans faster than required, people are able to show banks that there is a smaller risk in loaning money to them.

Never spend more than you can afford to pay back: The biggest mistake that people make when it comes to charge cards is borrowing more money than they can afford to pay back. As balances grow, so do minimum payments. A general understanding of how much your minimum payment grows with your balance and how much money you can afford to pay each month will help to gauge the amount of money it will be OK to borrow. Borrowing too much money on charge card accounts is the leading cause of financial hardship in the United States! Don't become part of this statistic!

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This article was written by Joshua Rodriguez and is brought to you by:
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